Gold drifts sideways in summer doldrums
LONDON (Aug 15) Precious metals drifted sideways in quiet conditions on Thursday morning, with the Northern Hemisphere summer doldrums and Independence Day celebrations in major consumer India taking their toll.
Spot gold was last at $1,337/1,338.40 per ounce, unchanged on Wednesday's close.
So far this week, the metal has gained about $13 or one percent while the market weighs the forecast for the longevity of in the US Federal Reserve's quantitative easing programme, which has been a major prop to gold. On Wednesday, the metal gained about $16.
"The weaker dollar coupled with potentially higher demand for metal from China gave the gold price a boost [yesterday]," Commerzbank said.
After briefly finding a foothold in the early part of the week, the dollar again weakened against the euro yesterday after the eurozone moved out of recession. The single currency was last at 1.3285.
In other gold market news, regulatory filings showed the Paulson & Co, the largest holder of the SPDR Gold Trust - the largest gold-backed exchange-traded fund (ETF) sold almost half its stake in the second quarter, lowering its holdings to 10.2 million shares from 21.8 million shares
Other sellers included Northern Trust at 5.0 million shares and Bank of America and UBS at more than 2.0 million shares each. Bucking the trend, Goldman Sachs reported an increase in holdings to 4.4 million shares, more than six times its holdings as of the end of March.
"Since the end of June, gold holdings by the ETF had fallen a further 6 percent to a low of 909 tonnes, though over the past week, have increased by 4 tonnes to 913 tonnes. This could be a sign that one of the factors that have driven the gold price lower is subsiding," ANZ said
In wider markets, Asian equities closed lower, with the Nikkei falling two percent and the Hang Seng down marginally.
Data today is focussed on the US, where July Core CPI is expected at 0.2 percent and weekly unemployment claims are forecast at 334,000. The Empire State Manufacturing Index will follow.
The rest of the metals were muted, with silver building modestly on its recent gains, adding 14 cents to $21.98/22.03 per ounce. Platinum was up $2 at $1,506/1,516 and palladium added $5 to $744/749.
